Where will mediation or arbitration occur for Face Foundrie if required by the franchise agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the Franchise Agreement. These provisions may not be enforceable under North Dakota law.
Although the Franchise Agreement provide that the place of arbitration will be held at the American Arbitration Association office that is closest to the location of our principal executive office, we agree that the place of arbitration will be a location that is in close proximity to the site of your business.
The Franchise Agreement requires that you consent to the jurisdiction of a court in close proximity to our principal executive offices. These provisions may not be enforceable under North Dakota law because North Dakota law precludes you from consenting to jurisdiction of any court outside of North Dakota.
Although the Franchise Agreement provides that the Franchise Agreement will be governed by and construed in accordance with the laws of the State of Minnesota, we agree that the laws of the State of North Dakota will govern the Franchise Agreement.
A contractual requirement that you sign a general release may be unenforceable under the laws of North Dakota.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the location for mediation or arbitration depends on the state where the franchise is purchased and the specifics of the franchise agreement. Generally, the agreement states that arbitration will occur at the American Arbitration Association office closest to Face Foundrie's principal executive office. However, Face Foundrie agrees that the arbitration location will be near the franchisee's business site.
For franchisees in Washington, any arbitration or mediation must occur in Washington state, or at a location mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator. In California, the franchise agreement requires binding mediation or arbitration in the city closest to Face Foundrie's principal executive office, though this may not be enforceable under California law.
For franchisees in South Dakota, while the Franchise Agreement requires arbitration proceedings to be held at the American Arbitration Association office closest to Face Foundrie's principal executive office, the actual site of any arbitration will be mutually agreed upon by the franchisee and Face Foundrie. Prospective franchisees should consult with legal counsel to understand how these state-specific addenda affect the enforceability of the arbitration and mediation clauses in their specific circumstances.